Abstract
This paper analyzes theories of saving applied to the international economy and the balance of payments. It is divided into three parts. Part I describes alternative concepts of saving from classical times through the present and discusses some of the facts and theories underlying the drop in the saving rate in the western world over the past two decades, with particular reference to the United States. Part II of the paper uses an inter-temporal trade model to analyze the effects of alternative changes in fiscal policy on the rate of interest, the balance of trade and international saving under different conditions of production and international openness. It is shown here that the effects of fiscal policy on the rate of interest and the balance of trade depends more on the period in which the government spending occurs than on the method by which the government spending is financed.
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Mundell, R. (1993). The International Distribution of Saving: Past and Future. In: Baldassarri, M., Paganetto, L., Phelps, E.S. (eds) World Saving, Prosperity and Growth. Central Issues in Contemporary Economic Theory and Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-22925-3_1
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DOI: https://doi.org/10.1007/978-1-349-22925-3_1
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